The Shortage Of Domestic Cotton Market Needs To Be Normalized

After the national storage quilt was digested, domestic cotton market demand had to rely on large quantities of imported cotton to meet the demand, and the new market development environment has basically formed.

If the domestic cotton market needs to remain at around 7 million 500 thousand tons, according to the estimated value of domestic cotton output, import volume and the amount of national cotton storage sold this year, the stock of domestic cotton market will be enough to meet demand in March next year.

In the recently held "2016 Shijiazhuang cotton industry forum", Yongan futures cotton researcher Kuang Bo told reporters that the market is worried that 2-3 years later, when the national cotton store is digested, even if the domestic cotton prices rise to the cost of production, or even higher than the cost, the cotton flower planting area in the mainland will not be able to recover quickly.

"At that time, if the planting area of the real estate area is not restored, how will the gap between production and demand in the domestic cotton market be increased? If the output of cotton in the world within 2-3 years is still at the current level, it will not rule out the possibility of a surge in cotton prices in the future."

Kuang Bo said.

According to the press, the annual output of cotton in China is about 4 million 500 thousand tons, and the annual market demand is about 7 million 500 thousand tons. There is a supply gap of about 3 million tons per year in the domestic market, mainly relying on the sale of national cotton and imported cotton.

Market organizations predict that if domestic cotton production continues to decline in the next few years, coupled with the changing weather and export policies of major cotton producing areas in the international market, and the rapid development of textile industry in India and other countries, domestic cotton supply will become increasingly tense.

Under the background of shortage of production and normalization, the downstream cotton industry in China often faces the pressure of fluctuating raw material prices, which is not conducive to the long-term and stable development of the industry.

"Cotton prices and supply are interdependent. Since 2015, global cotton production has been lower than consumption, and the global stock market has been declining, and inventory consumption is falling."

Kuang Bo said that from the perspective of the global supply and demand pattern of cotton market, the probability of cotton price showing a strong trend of oscillation is bigger, and there will not be a marked downward trend in the market.

According to the small cycle of supply and demand in cotton market, the fluctuation of cotton price depends on the fluctuation of supply and demand in stages.

It is a season harvest for year-round use.

Up to now, domestic cotton business inventories and industrial inventories are at their lowest level since 2010.

The yarn inventory pressure is significantly greater than that of grey fabric inventory, which deserves market attention.

At the same time, China's cotton consumption variables are internal and external spreads.

In addition, from the change of monthly import volume of the source countries of yarn imports, Vietnam's yarn has been growing rapidly in recent years, Pakistan yarn is stable, and India yarn is falling rapidly.

However, Kuang Bo reminded investors to pay special attention to the following issues:

First, the bid price of the national cotton store is set up in the international and domestic market prices.

In the case of price increase, the bid price of the national cotton store will definitely be raised in March next year, but the final purchase price of textile enterprises will be lower than that of new cotton.

Two, there is still more than 3 months to go out of the reserve cotton rotation. If the Chinese New Year holiday is removed, the production time will be shorter.

From this point of view, the rising trend of new cotton is difficult to sustain.

Three, by the end of this year, the replenishment of textile enterprises will play a supporting role in cotton prices. Although spinning enterprises will not purchase cotton in large quantities, the normal production volume needs to be guaranteed.

At present, there are fewer cotton resources in the mainland and most of the cotton resources are concentrated in Xinjiang. Although many cotton enterprises have procurement activities in Xinjiang, due to the shortage of railway capacity and the increase of freight rates on roads, the probability of rising cotton prices is increasing.

"Through the cotton market at home and abroad

Comprehensive analysis of the situation, if our country imports India cotton according to 40% tariff clearance calculation, import cost 17500-17800 yuan / ton, zhengmian short term top should be 18000 yuan / ton nearby.

Kuang Bo believes that in March next year, the new cotton spot price will oscillate in the range of 14500-16500 yuan / ton before the sale of State Cotton stores.

Kuang Bo said that the price of domestic cotton would be significantly higher than that of last year because of the fact that the international cotton price has gone up sharply and the probability of decline is not great. The cost and quality factors of domestic cotton will also be higher than that of last year.

During the sell-off period, the supply and demand situation of domestic cotton market will depend on the price difference between domestic and foreign cotton market, which will eventually pmit to the yarn Market and affect the change of yarn import volume.

Kuang Bo predicts that the average selling price will be around 14500 yuan / ton in the new year.

Considering the quality and cost support of new cotton, the main running interval of Zheng cotton price is 15000-15500 yuan / ton.